Which term refers to written authorities in the agency agreement?

Which term refers to written authorities in the agency agreement?

• A. Expressed Authority
• B. Implied Authority
• C. Apparent Authority
• D. Utmost Good Faith

Answer: (A)

Expressed authority is the explicit, written power given to an agent in the agency agreement. The insurer and the agent spell out in writing exactly what the agent is allowed to do—such as issuing policies, binding coverage, and collecting premiums. Because these powers are clearly stated in the contract, they constitute written authority and define the agent’s permitted actions. Implied authority, by contrast, is not written; it’s inferred from the agent’s position or past actions. Apparent authority arises when the principal’s representations lead a third party to believe the agent has authority, even if that power isn’t actually granted. Utmost good faith is a general standard of honesty in the insurance contract, not a description of authority granted in writing.

Expressed authority is the explicit, written power given to an agent in the agency agreement. The insurer and the agent spell out in writing exactly what the agent is allowed to do—such as issuing policies, binding coverage, and collecting premiums. Because these powers are clearly stated in the contract, they constitute written authority and define the agent’s permitted actions.

Implied authority, by contrast, is not written; it’s inferred from the agent’s position or past actions. Apparent authority arises when the principal’s representations lead a third party to believe the agent has authority, even if that power isn’t actually granted. Utmost good faith is a general standard of honesty in the insurance contract, not a description of authority granted in writing.